JLL, the world's leading real estate investment and advisory firm, today has released its first quarter (Q1 2015) Abu Dhabi Real Estate Overview report that assesses the latest trends in the office, residential, retail and hospitality sectors. The report was released today at Cityscape Abu Dhabi, which is taking place from 21-23 April 2015. JLL is once again leading the Market Overview presentation and panel discussion on the opening day of Cityscape Abu Dhabi.
The first quarter of 2015 recorded further growth in the residential rental and hospitality sectors while the residential sales, retail and office sectors remained stable. Following the decline in oil prices, JLL expects there to be a reduction in government spending this year which will slow down the pace of demand growth – growth is expected to continue, but at a lower rate.. On the other hand, the short-term supply picture is alsorelatively under control leading to generally stable market conditions.
David Dudley, Regional Director and Head of Abu Dhabi Office at JLL MENA, commented: "In the first quarter of 2015, the Abu Dhabi real estate market experienced strong growth in the hospitality sector and further growth of residential rents balanced by further stabilization in the office, residential sales and retail sectors. In contrast to the downward pressure we saw for the hospitality market in Dubai during the quarter, the Abu Dhabi hotel sector saw an increase in hotel ADRs for the first time since 2010 as demand outpaced supply expansion. The growth in hospitality demand is largely driven by a range of ongoing government initiatives to grow tourism demand - including the expansion of Etihad Airways and the Airport, further enhancement of Abu Dhabi's leisure offering, and campaigns by the Abu Dhabi Tourism & Culture Authority to promote Abu Dhabi regionally and globally."
He continued: "Residential demand remains dominated by residents who are interested in renting, rather than buying property. Rental growth for prime residential units continued at 4% during Q1, following 11% growth in 2014 and 17% in 2013, primarily due to limited quality supply across all price points and the removal of the rent cap. While average prime rents increased, the residential sales market remained stable this quarter, following 25% annual growth of prime residential prices over the past two years. The office market remained stable this past quarter, with demand remaining relatively flat and limited new supply entering the market. Overall vacancy rates for office space are expected to remain at this level throughout the year, given the significant proportion of near-term completions that are pre-committed."
He concluded: "Following a two year bull-run, we are currently going through a period of mid-cycle stabilization".
SECTOR SUMMARY HIGHLIGHTS – ABU DHABI: